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Coles hit with claims of $200 million in underpayments

Supermarket Coles has been hit by a class action lawsuit claiming it could owe current and former staff up to $200 million in unpaid overtime.

Adero Law is representing approximately 150 current and former Coles staff members in the case, yet believes the issue itself could affect up to between 5000 and 9000 salaried staff members. 

The case relates to an announcement made by Coles Group in February of 2020, in which it said it had underpaid approximately 1 per cent of its total workforce. 

Coles set aside $20 million to repay affected staff members, but claimants of the class action believe they were underpaid and never contacted by Coles.

In a statement on the ASX, Coles said it had been reviewing the remuneration of award covered salaried team members is committed to finalizing this review and remediating affected team members as son as possible.

“Coles has advised its existing team members of the issue and is aiming to commence remediation for relevant current members in mid-2020 and former team members shortly thereafter,” Coles said.

“In the context of these commitments, Coles believes the class action proceeding is without merit and will defend the proceeding.”

Lead claimant Maria Pabalan, a former Coles employee, said she was regularly required to work excessive overtime and that, while there is an onsite staff attendance time recording system, clock on and off times were manually altered to fit staff members’ rostered times.

Pabalan’s contract required 40 hours plus reasonable additional overtime, but was later told this overtime was unpaid when she raised concerns, being told her salary was an “all in” amount. 

According to Pabalan’s claims managers were eventually asked to clock on and off at their rostered times and then continue working, as the overtime was “flagging in the system”, which Coles deemed unacceptable.

“The Coles class action is unique, in that there appears to have been little transparency, or indeed any work done to actually follow up on the admissions of underpayments,” Adero Law managing principal solicitor Rory Markham said. 

“The level of under-reporting and the more concerning behaviour of amending time and attendance records, along with the culture of not recording accurate time, will be a strong feature of this litigation.”

This story has been updated to feature comment from Coles.

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